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1/14
A quick reminder to new investors in the space.
Blockchain's are a wonderful new invention that remove *required* counter-party trust and create *public* account ability in a *digital* space.
That is what blockchains are good at.
However,
A quick reminder to new investors in the space.
Blockchain's are a wonderful new invention that remove *required* counter-party trust and create *public* account ability in a *digital* space.
That is what blockchains are good at.
However,
2/14
There are also many things that blockchains are inherently bad at.
Some of them are things blockchains are only bad at currently.
Others are things they will likely always be bad at.
There are also many things that blockchains are inherently bad at.
Some of them are things blockchains are only bad at currently.
Others are things they will likely always be bad at.
3/14
A lot of scammy projects promote themselves as solving various problems that don't *actually* need a blockchain.
They do this because no one else is competing with them on that implementation and non-tech savvy people won't know any better.
A lot of scammy projects promote themselves as solving various problems that don't *actually* need a blockchain.
They do this because no one else is competing with them on that implementation and non-tech savvy people won't know any better.
4/14
Some other projects aren't scammy, they are just dumb (Hanlon's Razor: Never attribute to malice what can equally be explained by stupidity)
Lots of startups try and make solutions for industries they don't understand and so they don't work.
Some other projects aren't scammy, they are just dumb (Hanlon's Razor: Never attribute to malice what can equally be explained by stupidity)
Lots of startups try and make solutions for industries they don't understand and so they don't work.
5/14
Red flags are if the blockchain project you are investing in is:
1) Solving a physical space problem that requires continued verifiability. For example, a supply chain. Since the blockchain is digital native, it's hard to embed any tamper proof key to track.
Red flags are if the blockchain project you are investing in is:
1) Solving a physical space problem that requires continued verifiability. For example, a supply chain. Since the blockchain is digital native, it's hard to embed any tamper proof key to track.
6/14
2) Solving a problem where there isn't *PUBLIC* counterparty risk. Example, JPMorgan has their own quasi-blockchain for bank to bank transfers. Since all parties know each other and are legally liable they don't need a full blockchain. Most 'b2b' solutions don't need one
2) Solving a problem where there isn't *PUBLIC* counterparty risk. Example, JPMorgan has their own quasi-blockchain for bank to bank transfers. Since all parties know each other and are legally liable they don't need a full blockchain. Most 'b2b' solutions don't need one
7/14
3) Is doing any type of processing or data validation. These are ones that *could* be done in a decentralized fashion, but doing them without a blockchain has so far proved much more price efficient, so there needs to be other added value.
3) Is doing any type of processing or data validation. These are ones that *could* be done in a decentralized fashion, but doing them without a blockchain has so far proved much more price efficient, so there needs to be other added value.
8/14
4) Being used as a currency. Blockchain's are actually subpar currently at being transactable money. While that will continue to improve with lightweight chains and L2s, it will likely be stablecoins on those chains that get used, not new projects.
4) Being used as a currency. Blockchain's are actually subpar currently at being transactable money. While that will continue to improve with lightweight chains and L2s, it will likely be stablecoins on those chains that get used, not new projects.
9/14
5) Anything promising money, or talking about making you rich.
Just walk away.
5) Anything promising money, or talking about making you rich.
Just walk away.
10/14
6) So far anything that drops the buzzwords AI or IoT. So far we've not seen anyone actually implement much in those categories to even assess. So its normally a red flag.
6) So far anything that drops the buzzwords AI or IoT. So far we've not seen anyone actually implement much in those categories to even assess. So its normally a red flag.
11/14
7) Anything that is aimed at continuous measurement, or any other type of measurement, such as connection time tracking. Decentralized systems aren't designed to be accurate time pieces in a live environment, only when post dated.
7) Anything that is aimed at continuous measurement, or any other type of measurement, such as connection time tracking. Decentralized systems aren't designed to be accurate time pieces in a live environment, only when post dated.
12/14
Will there be exceptions to these rules?
Yes.
If you follow these will you still likely fall for at least one scam when buying crypto?
Yup.
Will there be exceptions to these rules?
Yes.
If you follow these will you still likely fall for at least one scam when buying crypto?
Yup.
13/14
Just remember, that in a bull market, a promise is rarely underpriced and craftsmanship is seldom over appreciated.
Just remember, that in a bull market, a promise is rarely underpriced and craftsmanship is seldom over appreciated.
14/14
What that means is the good stuff is boring (to everyone except the geeks) the rest is just gambling on over priced hope.
Blockchain's will solve a lot of problems, but they won't solve everything.
What that means is the good stuff is boring (to everyone except the geeks) the rest is just gambling on over priced hope.
Blockchain's will solve a lot of problems, but they won't solve everything.
